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Market Moves Suggest a Recession Is Unavoidable

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Re: Market Moves Suggest a Recession Is Unavoidable

#91

Post by FooHentai »

tomjakubowski wrote: post #82
reasonablemann wrote: post #52

Recessions are a necessary part of the business cycle. A lot of people would argue that global central banks have gone too far trying to avoid a recession and thus the next recession will be particularly brutal. Like laws designed to encourage forest growth, when the fire eventually comes it burns far brighter than the fire that burns in a forest left alone.

those laws (actually policies, I think) are meant to keep homes and other property from burning, not to encourage forest growth. wildfire suppression is rarely practiced in true wilderness areas in the US

So it's a pretty good parallel, really :)

Re: Market Moves Suggest a Recession Is Unavoidable

#92

Post by zeroname »

RyanShook wrote: post #6
malvosenior wrote: post #2

If this is true, where is the best place to invest 10k-100k USD today?

Depends on your time horizon. If you have over 20 years before retiring the broad stock market is still likely going to outperform pretty much any other investment but it will be a bumpy ride.

It would still be stupid to buy in at the top of the market if you assume it's going to tank - which is far more likely now.

Re: Market Moves Suggest a Recession Is Unavoidable

#93

Post by 40acres »

I was in high school during the last recession so I have no idea of what to expect, but how does one take advantage of a recession? Do you invest in blue chip stocks that you assume will ride out the recession and bounce back? (Apple in Google in 2008 would've been solid investments), do you take advantage of rising interest rates and buy bonds in addition to boosting your savings account? Do you buy a house? What's the m.o?

Re: Market Moves Suggest a Recession Is Unavoidable

#94

Post by alttab »

Flavius wrote: post #7
malvosenior wrote: post #2

If this is true, where is the best place to invest 10k-100k USD today?

Why would you invest just before a recession? Keep your cash and invest when the market is down.

You should always be investing because timing the market is a fools errand. The question is how much?

Re: Market Moves Suggest a Recession Is Unavoidable

#95

Post by aliston »

repsilat wrote: post #51
aliston wrote: post #17

How can something "suggest" a recession is "unavoidable." If its a suggestion, then by definition it isn't unavoidable. These articles are silly. You'll find them for every time the market sneezes. October 2015, World Faces a Recession Next Year: https://www.cnbc.com/2015/10/13/citis-buiter-world-faces-rec... June 2016, The Next Recession is Already Here: https://www.cnbc.com/2016/06/21/the-next-recession-is-alread..…

> How can something "suggest" a recession is "unavoidable." If its a suggestion, then by definition it isn't unavoidable. Nonsense. Say I have a coin that I suspect has heads on both sides. Instead of just checking the coin, I flip it ten times in a row and check the result -- ten heads. "Coin flips suggest 'heads' unavoidable." The article is saying there is some situation in which a recession is unavoidable, and si…

My point is that we're talking about a prediction regarding something for which there will always be a degree of uncertainty. The reason the author is "suggesting" a recession is unavoidable is because there's no such thing as an unavoidable recession, just as there is no such thing as an unavoidable heads coin flip.

Re: Market Moves Suggest a Recession Is Unavoidable

#96

Post by patorjk »

jamestimmins wrote: post #49

Things that keep me up at night as a software contractor/freelancer: if there's a recession, are contractors the first to go? One counter-argument is that contractors can be a cheaper way for companies to build products (since it's not full time), which might mean companies favor contractors. On the other hand, companies who are reluctant to lay off full-time staff may start by canceling contract relationships.

That's always what I've been told. This isn't apple to apples, but I've worked as a government contractor for the past 15 years. In my experience, when money starts to dry up, sub-contractors are the first to go, but sub-contractors who are particularly important get offered positions by the prime contractor. I've also seen across the board pay cuts go out rather than people getting cut, but that rarely ends well (as anyone who knows their worth will immediately start looking elsewhere).

Re: Market Moves Suggest a Recession Is Unavoidable

#97

Post by agumonkey »

40acres wrote: post #93

I was in high school during the last recession so I have no idea of what to expect, but how does one take advantage of a recession? Do you invest in blue chip stocks that you assume will ride out the recession and bounce back? (Apple in Google in 2008 would've been solid investments), do you take advantage of rising interest rates and buy bonds in addition to boosting your savings account? Do you buy a house? What's…

You gather with friends and find solutions together

Re: Market Moves Suggest a Recession Is Unavoidable

#98

Post by FooHentai »

neaden wrote: post #33
wil421 wrote: post #4

Would it be wise to wait a year before buying a house? If a recession hits it might turn my areas buyers market into a fire-sale. I guess if the fed isn’t raising rates then it’s not an issue. Waiting would also allow someone to increase their down payment.

If people here really knew whether or not that was a good idea we would be billionaire rock-star investors. Trying to time the market is a fools errand for most folks.

I was gonna say similar, and fall back on the old 'Market can remain irrational longer than you can remain solvent' trope :)

If you really want a safe(r) hedge in this situation, one option is to buy the cheapest property you can live with. That way:

- You're off the rental ladder - Are building up an asset with mortgage payments - Are in as shallow as possible if an event occurs that puts your ability to service the morgage in jeopardy - Are out less if you do lose the property - Can make a jump to a more expensive/nicer property in due time if market conditions allow - BUT potentially miss out on capital gains/leverage as a lower cost property will increase, in real terms, less value if property prices rise.

If you're risk averse (I am) it weighs up as a good option. But you miss out on significant potential rewards (not living in as nice a place, not reaping as much capital gains, longer commute or lower wages in the area). Such is gambling.

Re: Market Moves Suggest a Recession Is Unavoidable

#99

Post by soundwave106 »

interfixus wrote: post #12
baybal2 wrote: post #5

Earlier quoted context omitted.

Into a piece of yellow metal. Edit. More background on that: In 2014, after years and years of my parents droning "think about buying a house," I finally decided to teach my parents a lesson, and show them just how bad their investment advice is. So in the end, I lost around 53 thousand dollars in total from FX, fees, lawyers, drop of property value, and my ability to sleep well at night. And in 2016, I got kicked ou…

No idea why you are downvoted. Indisputably the safest investment for several millenia running.

Depends what you mean by "safe".

Gold is considered a commodity investment, and shares the high volatility that is common in this class. (https://view.ingwb.com/sector-and-volatility-commodities)

Gold does have unique historic status as a currency or a backer of currency. I'm not in 100% agreement, but this does mean some see gold as a hedge against large-scale financial trouble.

However, that same historic status has made this asset in particular vulnerable to investment scams. (https://www.aarp.org/money/scams-fraud/info-2016/gold-coin-i...) This is one caution about this investment that you don't have to worry about as much compared to if you invest in, say, pork futures.

I would argue the "safest investment" is a diversified portfolio, personally.

Re: Market Moves Suggest a Recession Is Unavoidable

#100

Post by techopoly »

Flavius wrote: post #7
malvosenior wrote: post #2

If this is true, where is the best place to invest 10k-100k USD today?

Why would you invest just before a recession? Keep your cash and invest when the market is down.

This is true, however, how does one know when the market is down? It's down now. But maybe it's falling much further and you're catching the falling knife? Maybe it starts a 5-year boom tomorrow and you've missed your chance?

I guess that extends the thought expressed in other comments that no one really knows when a recession is about to hit. If they did, it would be preventable.

A good investor knows his risk and his time horizons. Obviously, don't throw thousands into the stock market just before you're about to retire, even if the market looks to be down, if you don't have a very sizable nest egg. Additionally, a good investment should be a good investment even during the hard times -- for instance, I don't think Amazon is going anywhere for a while. Otherwise you're speculating, which is a valid form of investing, but you can't ignore the risk, i.e. you have to have cash and assets that will protect you if you lose all your money or the apocalypse happens.

It's complex. I'm not saying I'm a good investor, but I am trying to learn from the past!

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